Following yesterday's Yen surge in the aftermath of the disappointing BOJ announcement, the pain for USDJPY long continued, with the key carry pair tumbling as low as 106, the lowest level since October 2014 before stabilizing around 107, and is now headed for its biggest weekly gain since 2008, which in turn has pushed the US dollar to to its lowest close in almost a year as signs of slowing growth in the U.S. dimmed prospects for a Federal Reserve interest-rate increase. As a result, global stocks fell and commodities extended gains in their best month since 2010.
And just like that the "no brainer" party's over. Remember when in January 2014 Carl Icahn laid out his extensive thesis on why being long AAPL is the best investment out there? Or when a little over a year later, hoping for even more stock buybacks (even as he was decrying short term activism) he boosted his price target on AAPL to $240? All that is now over and moments ago Carl Icahn admitted that the hedge fund hotel holding AAPL stocks, which consisted of 163 hedge funds as of December 31, has one less member, and he has sold his entire Apple position.
- Fed to sit tight on rates at March meet, hint at hikes to come (Reuters)
- Election setback a 'wake-up call' for Merkel, media and politicians say (Reuters)
- Germany’s Merkel under renewed attack after populists’ poll success (FT)
- Temperatures Rise on Eve of Next GOP Contests (WSJ)
- Carl Icahn setting up son to take his place: sources (Post)
- Turkey Vows Swift Retaliation After Bomb Kills 37 in Capital (BBG)
"They Blew It All On Hookers, Blow And Fancy Toys" – Hedgie Sees Lower Oil, Soaring Gold, & QE For The PeopleSubmitted by Tyler Durden on 03/07/2016 21:00 -0400
"...most people simply assumed the good times would go on forever... because it was different this time. But like any uninhibited party fueled by unlimited cash, the hangover was sure to follow."
Just one day after the DOJ unveiled its had indicted Chesapeake Founder and former CEO Aubrey McClendon on federal charges of conspiring to rig bids for oil and natural gas leases, moments ago the Oklahoma Police announced that he was found dead in a car accident, when while traveling in a 2013 Chevy Tahoe at a high rate of speed he crashed while driving on a two-lane highway and was engulfed in flames.
While the market has had its share of bogeymen to worry about so far in 2016, mostly along the lines of the "Four Cs", namely China, Crude, Credit and Currencies, it has so far largely ignored one letter: the Big D, for Donald, as in how would a Trump presidency affect the market. And, as Reuters writes, it is time for Wall Street to add "the juggernaut that is Donald J. Trump to the list of what-ifs that is worrying Wall Street."
"Before any big move in gold we have always seen extreme volatility or volatility pick up. This was just a taste of what’s to come in the next few years... We’ll look back at this and be reflecting on how minimal this move was compared to what’s going to happen as we go forward... They’re just positioning themselves for what’s to come."
Having warned - correctly - of the impending collapse of the US credit markets last year, it just seems ironic that Carl Icahn's firm has been downgraded to "watch negative" from stable by S&P, implying a cut to junk may be imminent. Just as we detailed earlier, activist investors have suffered greatly in the oil rout, and S&P cites declining investment values in the firm's portfolio, which have smashed the loan-to-value ratio up to 45% (a crucial threshold for the ratings agency).
Thirteen activist investors with the largest fund exposure to the energy sector have suffered a combined $9.2 billion in unrealized paper losses in 2015, according to quarterly filings analyzed by hedge fund data firm Symmetric.io. But nobody's combined loss is as big as that of Carl Icahn.
Having opened his position in AAPL in Q3 2013, Carl Icahn's projections, prognostications, and positioning have all lent credence (for CNBC watchers) to buying into the "no brainer" stock. However, it appears the plunge in the stock of the last few months has taken the shine of Icahn's glee as, according to his fund's latest 13F, he dumped 7 million shares (or aound 14% of his position) in Q4 2015. In addition, Greenlight's David Einhorn dumped 44% of his holding in Tim Cook's releveraging firm.
Whether you are Warren Buffet, Carl Icahn or Bill Ackman cutting losses is the hardest thing to do in Financial Markets these days.
- Yellen's dilemma: A downturn with no easy response (Reuters)
- Clinton, Sanders clash over Obama as they vie for minority votes (Reuters)
- Risk Grows of Markets Sparking Recession (WSJ)
- Global Stock Rout Eases Amid Oil Advance as German Bonds Decline (BBG)
- U.S. Benchmark Yield Will Be at Record Low in March at This Rate (BBG)
- Oil Prices Rally on Hopes of Production Cuts (WSJ)
Investment expert, Harry Markopolos, wrote detailed letters to the SEC for years, raising red flags that Bernie Madoff was running a Ponzi scheme – only to be ignored by the SEC as Madoff fleeced more and more victims out of their life savings. Today, there are two equally erudite scribes who have jointly been flooding the SEC with explosive evidence that some Exchange Traded Funds (ETFs) that trade on U.S. stock exchanges and are sold to a gullible public, may be little more than toxic waste dumped there by Wall Street firms eager to rid themselves of illiquid securities.
The Central Banks have turned us into dispensible members of the Suicide Squad